Answer:
Option (b) is correct.
Explanation:
The Journal entries are as follows:
(i) On November 1, 2015
Retained Earnings [$3 × 20,000] A/c Dr. $60,000
To Dividend Payable $60,000
(To record the declaration of dividend)
(ii) On November 30, 2015
Dividend Payable A/c Dr. $60,000
To cash A/c $60,000
(To record the payment of dividend)
Answer:
1. Favorable
2. Unfavorable
3. Unfavorable
4. Favorable
5. Favorable
6. Unfavorable
7. Favorable
8. Favorable
Explanation:
1. Favorable
Less Profit is now being earned per sale
2. Unfavorable
More Debt more Financial risk
3. Unfavorable
Less Profit is now being earned per sale
4. Favorable
A lower ratio is good shows efficiency utilization of resources
5. Favorable
The company is efficient in collection of debt
6. Unfavorable
The earning per share is lower
7. Favorable
More efficient in inventory management
8. Favorable
More return given to investors
Answer:
difference between the offered price and the variable cost per unit
Explanation:
The contribution margin per unit of a product is the difference between the selling price per unit and variable cost per unit. The contribution margin per unit shows the amount available from each unit sold that cater to fixed costs and profits. A higher amount of contribution margin is desirable as it assures that each unit sold is contributing to profitability.
When the variable costs are more than the selling price, it means a business is not meeting any of its costs. The firm is running at a loss and is likely to close down soon. Before accepting or rejecting the special offer, the business should compare the proposed price and variable costs. If the contribution margin is positive, then the order should be considered.
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